Heavy-hitting players in the hospital industry—including Intermountain Healthcare, the Mayo Clinic, and HCA Healthcare—felt that they had little choice but to ban together to fix what they consider a flawed supply chain for generic medications, says Dan Liljenquist, a vice president at Intermountain who initiated the project.
In a recent interview, Liljenquist tells Stat that Intermountain had been dealing with a shortage of nearly 200 drugs for years, a situation that became untenable. The not-for-profit drug company that the hospitals formed is called Civica Rx, which will begin putting 14 generics (yet to be named) on the market by mid-2019. Civica Rx will partner with drug manufacturers. “The drugs we’re talking about have been on the market and a lot of people … know how to make [them],” says Liljenquist. “What’s unique for our model is that we’ll be able to deliver pre-contracted volumes, so it makes it easier for these companies to make a return on investment working with Civica over a period of time.”
Civica Rx used three criteria: drugs deemed essential by the World Health Organization, drugs that are in short supply, and drugs where there have been significant price increases. “Those three filters gave us about 200 drugs,” says Liljenquist. “From there, we looked at what would make the biggest impact clinically. Frankly, we tried to keep it to 10 and ended up with 14, because some had to be in the first tier of drugs we want to develop.”
The products will be hospital-administered drugs: pills, injectables, patches. Transparency is key. “This is a fundamental, non-negotiable part of this business,” says Liljenquist. “We’re going to publish prices. If our members are going to purchase from our business, they need to know what it costs. We won’t be engaged in the cost-minus rebate game that hides cost from customers.”